Mortgage discrepancies

Troubled mortgage companies routinely placed Hispanics, Blacks, and borrowers of smaller loan amounts into higher-priced loans, according to a new Federal Reserve study.

The findings are based on a study of the 169 non-bank lenders that closed shop in 2007. It showed the 169 non-bank lenders were generally more likely to place consumers in higher-priced loans, accounting for 51 percent of that market in 2004 and nearly 15 percent of high-priced first liens in 206. Higher-priced loans are subprime and Alt-A loans whose annual percentage rates were at least 3 percentage points higher than U.S. Treasury securities with comparable durations.

The study also showed 74 percent of blacks and 63 percent of Hispanics got high-priced loans when using the now-defunct companies versus 46 percent among non-Hispanic white buyers.

Some 74 percent of people who borrowed less than $100,000 were placed in higher-priced loans versus 53 percent for borrowers of loans between $100,000 and $249,000 and 47 percent for borrowers of loans more than $250,000.